Good News for Salaried People! No Tax on Income Up to 12 Lakh! Unbelievable!
India Budget 2025-26 No Tax on Income Up to 12 Lakh: The recent announcement regarding the Income Tax slab and the rebate of up to 12 lakh has left many individuals perplexed, following the Finance Minister’s address in Parliament concerning the Union Budget for 2025-26. A significant factor contributing to this confusion is the widespread skepticism regarding the feasibility of such a high exemption threshold. Previously, the exemption limit was set at 7 lakh, with expectations leaning towards an increase to only 8 or 9 lakh. This development represents a substantial relief for salaried individuals, who consistently face rising Income Tax obligations despite precise income calculations.
No Income Tax Up To ₹ 12 Lakh – Chart Explains!
If an individual with a salary earns between 4 lakh and 12 lakh, they will not be subject to taxation under the new regime. However, if their earnings reach 13 lakh, they will be required to pay income tax according to the new tax slab. The table below will provide further clarity on how to calculate income tax.
| Income | Income Tax |
| ₹ 4 Lakh | No Tax |
| ₹ 5 Lakh | No Tax |
| ₹ 6 Lakh | No Tax |
| ₹ 7 Lakh | No Tax |
| ₹ 8 Lakh | No Tax |
| ₹ 9 Lakh | No Tax |
| ₹ 10 Lakh | No Tax |
| ₹ 11 Lakh | No Tax |
| ₹ 12 Lakh | No Tax |
| ₹ 13 Lakh | Slab Applicable (See Below) |
Income Tax Calculation for ₹ 13 Lakh
| Slab | Tax | Income | Tax Amount |
| Up to 4 Lakh | No Tax | ₹ 4 Lakh | Nil |
| 4 to 8 Lakh | 5% | ₹ 4 Lakh | 20,000 |
| 8 to 12 Lakh | 10% | ₹ 4 Lakh | 40,000 |
| 12 to 16 Lakh | 15% | ₹ 1 Lakh | 15,000 |
| ₹ 13 Lakh | 75,000 |
New Slab Rates for FY 2025-26
The reduction of income tax slab rates and the introduction of rebates will provide significant tax relief to the middle class, especially to salaried individuals. This, in turn, is expected to enhance household consumption expenditure and stimulate investment.
| Income | Tax Rate |
| Up to 4 Lakh | Nil |
| 4 to 8 Lakh | 5 Percent |
| 8 to 12 Lakh | 10 Percent |
| 12 to 16 Lakh | 15 Percent |
| 16 to 20 Lakh | 20 Percent |
| 20 to 24 Lakh | 25 Percent |
| 24 Lakh Above | 30 Percent |
No Income Tax for ₹ 12.75 Lakh for Salaried People!
The Finance Minister announced favorable news for taxpayers, stating, “Under the new regime, individuals will not be required to pay income tax on earnings up to Rs. 12 lakh (equivalent to an average monthly income of Rs. 1 lakh, excluding special rate income such as capital gains). For salaried taxpayers, this threshold will be Rs. 12.75 lakh, taking into account a standard deduction of Rs. 75,000.” Additionally, a tax rebate is being offered alongside the benefits from the reduction in slab rates, ensuring that these taxpayers will have no tax liabilities.